Momentum VS Volatility. is there a Misconception?

[.sigma]

Volare = magnitude/range

Momo = thrust of price in a continued direction, either up or down.

 

[.sigma]

Think of a ball bouncing down a flight of stairs. The overall direction - momentum - is down. But it will bounce on each step of stairs - a measure of volatility.

Thus, a longer term trader can be trading momentum, but shorter term is looking for volatility. They aren't mutually exclusive. And some traders will in fact hold a longer position in a security, and trade around that with shorter positions.

nice. But this is like assuming constant vol across vertical skews.

Instead, let’s assume the stairs aren’t straight. What if we are dealing with spiral stairs? Or maybe a stairs with a central landing then continue? Or even an L-shaped stairs? Theories are tricky trickyyyyyy.

 

[lindq]

nice. But this is like assuming constant vol across vertical skews.

Okay smartass, what market environment do spiral stairs represent? Or L-shaped stairs?

Riddle me that, will ya?

 

[taowave]

Hi,you are getting some misinformation here,and my best advice would be to calculate momentum and SD on your own.Use varying examples, I.e, a stock making wild swings but having the start and end prices equal.Take another example of a stock making a 10 percent move up every day..Compare SD and Momo.Use 10 days of data,calculate 3- 5 day Momo.Its basic math,ignore logs,stick with price..

Do the work,keep it simple,you will get a much better understanding...

Thanks, I like the analogy of driving a car. So just to confirm,
Example:
If I only take the date range of [20th Dec 2020 to 8th Jan 2021] into consideration; then Bitcoin has HIGH MOMENTUM(because of an unusually large amount of price move) and LOW VOLATILITY( because it moved only in the upward direction)? Right?View attachment 249139